This excerpt taken from the ETFC DEF 14A filed Apr 24, 2009.
Economic and Corporate Challenges
We operate our business in an industry and in geographic areas in which the demand for top level executive talent traditionally has been extremely high. Beginning in the later part of 2007, the credit and capital markets came under significant stress, and this stress had a disproportionately negative impact on us due to the composition of the balance sheet at E*TRADE Bank. In particular, we realized significant losses in 2008 arising primarily from certain mortgage-related assets held by E*TRADE Bank. In contrast to this very distressed portion of the business, other aspects of our business strengthened during the year. In particular, the Board and Compensation Committee saw the following areas of improvement:
At this time, our strategy is to continue to profitably grow the retail customer franchise and mitigate the risks associated with the balance sheet, including closely managing and improving our capital position. In light of the significant challenges presented in managing the balance sheet in the current environment and maintaining and strengthening the other aspects of the business, the Compensation Committee feels it is important to attract and retain experienced senior executives with relevant experience.